Market News

Probable harvest delays support soybeans, corn

Soybeans were higher on short covering and technical buying. Harvest activity is ongoing with minor delays expected in some areas into the weekend. Anecdotal yields are generally poor following the hot, dry finish to the season. The USDA’s updated yield and production estimates are out October 12^th. Soybean meal was higher and bean oil was lower on the adjustment of product spreads. The Federal Reserve kept interest rates unchanged but is signaling another possible increase in November. Unknown destinations bought 120,000 tons of 2023/24 U.S. soybeans. Given the recent activity, that could turn out to be China when it’s time for delivery, but China is still also aggressively buying beans from Brazil, The USDA’s weekly sales numbers are out Thursday morning. The trade is monitoring mixed planting conditions in South America. CONAB is projecting higher planted area and yield for Brazil this year, with a potential record crop of 162.43 million tons.

Corn was higher on short covering and technical buying. Corn is watching harvest activity and the probable near-term delays, along with yield results. Ethanol margins remain strong and feed demand is good, helping to cancel out some of the bearish influence from exports. The U.S. Energy Information Administration says ethanol production last week averaged 980,000 barrels a day, a drop of 59,000 from the previous week due to seasonal maintenance, but a gain of 79,000 from a year ago thanks to solid margins. Stocks of 21.681 million barrels were 510,000 above the prior week’s almost two-year low, but 820,000 below a year ago. CONAB sees corn losing planted area for all three cycles in Brazil to other crops, including soybeans, also expecting a decline in yield, for a production projection of 119.8 million tons.

The wheat complex was mostly higher. Chicago and Minneapolis were up on oversold signals, while Kansas City was mixed, adjusting spreads. As much as anything, the mid-week session’s biggest feature was “path of least resistance” type trade, with the complex monitoring U.S. winter wheat planting and the spring wheat harvest. Australia is hot and dry, while Argentina could see only limited near-term rain, but only about a fifth of the world’s wheat originates from the Southern Hemisphere. Russia continues to control the export market due to a big price advantage and some grain is moving out of Ukraine’s ports despite the lack of a formal export agreement.